Best Accounting Certifications of 2020
By Brandon Vagner, CPA, Ph.D. & Former KPMG Manager
We know accounting is an excellent degree, but what is the best accounting certification to compliment that accounting degree and boost your career to the next level? This is a big debate, and it really depends on what your long term goals are. I’m going to walk you through in detail some of the absolute best accounting certifications available to you.
What is the best accounting certification? Well, you will notice in this article that many of these accounting certifications are intended for specific career paths. So, I think it’s extremely important to pursue the certification that aligns best with your career interests. That said, I do strongly feel the CPA, which is actually a license, should be highly considered for all accountants no matter what their specialized interests are. Ultimately, the CPA is very powerful, and if you’re interested in one of these other accounting certifications, I think you’ll find the combination of the CPA license and the other certification to be extremely powerful for your career.
Certified Public Accountant (CPA)
I would encourage you to ask any non-accountant what a CPA is or what they know about it, and I guarantee you almost anybody you ask will know exactly what it stands for and they will likely tell you that they heard it is a hard exam. The CPA, which is technically a license, is arguably one of the most well known of the best accounting certifications, and it’s certainly one of the most well respected.
If you were to tell me that you wanted to either work in an accounting firm as an auditor or tax accountant, then I would highly recommend obtaining your CPA license. In many cases, your upward advancement in an accounting firm is going to depend on your ability to obtain the CPA license.
If you told me your career goal was to become a Chief Financial Officer (CFO), Controller, or Director of Accounting, then I would also highly encourage you to obtain your CPA license. Typically, these positions, or the ones leading up to them, are going to require that you have your CPA license.
Related: Best CPA Review Courses
Example Stories: Certified Public Accountant (CPA) Importance
I like real world stories to help showcase things. That said, I’ll tell you a couple hiring stories about former colleagues of mine. Keep in mind that my background is Big-4 accounting (one of the largest firms in the world). I worked at KPMG for a long time and left there as a Manager to pursue my passion of helping others achieve their educational and career goals. While at KPMG, I worked with a lot of people and got to watch just about all of them hit the job market at one point or another. It was and still is a lot of fun watching them accept amazing jobs in the accounting profession. Well, most of them accepted amazing jobs, but not all.
By far, the people who had their CPA, found excellent positions in a very short period of time. The demand was and still is extremely high for accountants, but especially ones with their CPA. Think about it, if you were a hiring manager and had two identical candidates applying for a position. Would you hire the one that has their CPA license or the one that doesn’t? This is assuming their experience, schooling, personality, etc. are all identical. More times than not, the person with the CPA license will win out during the hiring process.
I watched my colleagues with their CPA license apply for and accept positions across the board and one even accepted a CFO position. I’m talking people in their late 20’s becoming Directors, CFOs, etc. Most of them are really knocking their careers out of the park.
There is always a flip side though. I’ve also seen colleagues without their CPA license really struggle to find a job. One particular individual was on the market for upwards of 6 months. That person was constantly being asked about why he didn’t have his CPA license, and to this day it is still an issue for him.
I could literally write a 5,000 word article on just the CPA license, but long story short, the CPA license is incredibly powerful and is an accounting certification / license you should really consider getting.
One last quick thing on the CPA. Don’t let people talking about how hard the CPA exam scare you. With the right CPA Review Course and exam strategies, you can absolutely pass the CPA exam. A lot of people like to complain about it, but you CAN pass. I know people are nervous about the exam and some do struggle, that’s why I’m launching the CPA Exam Success Master Training. If you think the CPA might be the accounting certification for you, then I highly recommend checking out that training. It has the power to save you a lot of time and head aches.
Certified Management Accountant (CMA)
This accounting certification is really heating up. More and more people are opting to get their CMA. There are a lot of arguments as to why, but regardless, it is a very strong accounting certification to have. I highly recommend you seriously consider it!
I have a friend I went to school with who obtained her CMA and is absolutely crushing her career. She is a Manager at Deloitte & Touche, LLP and really loves what she does. One thing she is continually advocating is the CMA. Now, she also has her CPA, but she felt it was necessary to obtain the CMA in addition to the CPA. She is in an advisory role, and the CMA is highly regarded in that sector.
What is the difference between the CPA and CMA?
As you’ll find on the Institute of Management Accountants website, the CMA is all about understanding the “why” behind the numbers and has more of a management focus. Hence the name, Certified “Management” Accountant. Whereas, the CPA exam really dives into testing your technical understanding of standards. Here are the topic areas of each part of the CMA to give you a better idea of what you’ll be tested on.
Part One: Financial Reporting, Planning, Performance, and Control
15% External Financial Reporting Decisions
30% Planning, Budgeting, and Forecasting
20% Performance Management
20% Cost Management
15% Internal Controls
Part Two: Financial Decision Making
25% Financial Statement Analysis
20% Corporate Finance
20% Decision Analysis
10% Risk Management
15% Investment Decisions
10% Professional Ethics
What job can I get as a CMA?
Keep in mind there all kinds of factors that go into hiring, but the following are positions that CMAs have had:
Chief Financial Officer, Chief Executive Officer, Controller, Vice President, Finance, Finance Manager, Financial Analyst, Internal Auditor, Senior Accountant, Cost Accountant, and more.
How long does it take to study for the CMA?
You can expect the CMA exam process to take 12 – 18 months. That said, you have 3 years to complete both parts. The Institute of Management Accountants recommends you study between 150 – 170 hours per part.
What are the pass rates for the CMA exam?
Very similar to the CPA exam, the pass rates for the CMA sit right around 50%.
Chartered Financial Analyst (CFA)
The beauty about having an accounting degree is that you can do so many different things. Maybe tax, audit, or corporate financial accounting is not for you. No problem. There are a number of other things you can do, and some of those include working for an institutional investment firm or even an insurance company. If you end up wanting a career in investment decision-making, then you’re definitely going to want to explore the Chartered Financial Analyst (CFA).
What job can I get as a CFA?
Institutional investment firms are filled with CFAs. As a CFA, you can easily work with a hedge fund or mutual fund, and many find this type of work to be extremely interesting and financially rewarding. I had a KPMG colleague who left the accounting firm to pursue an investment career. He was actually hired by a guy who my father went to college with and also had an accounting background and then turned CFA. They both do EXTREMELY well for themselves, and, from discussions I’ve had with them, absolutely love what they do.
As reported by the CFA Institute, the top five global job titles for CFAs are Portfolio Manager, Research Analyst, Chief Level Executive, Consultant, and Risk Manager. There are over 150,000 CFAs across 163 countries.
How long does it take to study for the CFA?
Before I get into the details, remember that anything worth getting in life is going to take serious effort. Don’t let these numbers scare you away from going after the CFA.
The first thing you have to know is that there are 3 separate sections to the CFA exam. They are called the Level 1, Level 2, and Level 3 exam. The CFA Institute estimates that you’ll need to study 300+ hours per exam level. They also estimate that the average CFA candidate will need to devote 4+ years to the process to earn the CFA designation. Yes, this is a serious time commitment, but I encourage you to think long term. What is 4 years compared to a 40+ year career?
What are the pass rates for the CFA exam?
Here are the pass rates by each individual Level, as reported by the CFA Institute:
Level 1 exam pass rate: 43%
Level 2 exam pass rate: 45%
Level 3 exam pass rate: 56%
Certified Information Systems Auditor (CISA)
Anything information systems is HOT right now! There are so many opportunities available to accountants with an interest in information systems. There are many people that go through their accounting degree with just the CPA on their mind, but a good portion of those folks also have their eye on the CISA.
Straight out of college, I had a roommate who graduated with me with his bachelor and masters in accountancy. The difference between him and myself was that he was dead set on pursing an accounting information systems career track as opposed to the typical CPA. That guy has had one incredible career. He worked at Deloitte in a number of capacities, but all were information system based. Ultimately, he ended up working for Facebook in their anti-money laundering division.
That same guy I was just talking about above had his eye on the CISA. He didn’t even consider the CPA, because he knew he wanted to be purely information system focused. Now, I’ll tell you that I would highly encourage you to get your CPA in addition to the CISA if you’re interested in information systems, but you don’t have to. That double designation is extremely powerful.
What job can I get as a CISA?
It goes without saying that you will be qualified to be an information systems auditor, but that experience can help catapult your career. I know a guy who worked as an IT (information technology) auditor at KPMG and is now a VP, Head of Global IT Audit for an excellent company. I also know multiple people who are now IT related Directors that started their careers as staff IT auditors.
So, what do you do as an IT auditor? Well, here is an example for you. If I was managing an audit and the client had a key control that their system only allowed 2 specific individuals to post manual journal entries, then I would call in the IT auditors to test that system control. That’s just one quick simple example, but hopefully that gives you an idea of the type of work you might be called upon to complete.
How long does it take to study for the CISA?
The CISA exam is a 4 hour exam that has 150 multiple choice questions. The length of time to study for this exam really depends on each person individually, but if I had to give a general estimate, I would say most people should be able to study for and take the CISA exam within a couple months. If you are really serious about studying hard and had a lot of time to study every day, then I would say you could get it done in a much shorter time span than that.
What are the pass rates for the CISA exam?
The ISACA is the CISA exam creator. Pass rates are no longer released, but assuming around a 50% pass rate is probably pretty safe. That said, I never let pass rates influence my decisions, because there are so many unique reasons why people fail. Work hard, and you should be just fine.
Certified Internal Auditor (CIA)
The CIA, which is governed by the Institute of Internal Auditors, is a wonderful certification for many reasons. Most people who get their CIA are looking for upward advancement during their career, and it can definitely help you achieve advancement. Many companies like to hire within their own organization as opposed to conducting an external search, and as an internal auditor you will attain a vast knowledge of your organization from significant exposure to both the operational and financial elements of the organization.
All factors considered, an internal audit position can be a powerful springboard to other opportunities within an organization.
How long does it take to study for the CIA?
The CIA exam is a 3 part exam. Part 1 of the CIA exam is a 2.5 hour exam on Essentials of Internal Auditing and consists of 125 multiple choice questions. It’s very difficult to give an estimate of study hours, because everyone’s situation is so different, but I would plan to study for about a month for each CIA part. I think many can complete their studies much faster, but some may need even longer than that.
Part 2 of the CIA exam is a 2 hour exam on Practice of Internal Auditing and consists of 100 multiple choice questions.
Part 3 of the CIA exam is a 2 hour exam on Business Knowledge for Internal Auditing and consists of 100 multiple choice questions.
What are the pass rates for the CIA exam?
The pass rates for the CIA exam are right around 40%.
Enrolled Agent (EA)
Becoming an enrolled agent is for tax specialists who wish to be federally licensed to represent taxpayers before the IRS regarding collections, audits, and appeals.
How long does it take to study for the Special Enrollment Examination (SEE)?
An interesting fact about becoming an EA is that you don’t necessarily even have to take the SEE exam. If you have 5 or more years of experience with the IRS and that experience involved tax code interpretation and application, then your experience might be good enough to substitute for taking the EA exam. If you think you might qualify for exemption, check out this IRS former employee informational page.
Let’s assume you don’t have that 5 years of experience with the IRS. The SEE exam is 3 parts.
SEE Part 1: Individuals
SEE Part 2 : Business
SEE Part 3: Representation, Practice and Procedures
Each one of these parts has 100 questions and is 3.5 hours of actual testing time.
Education, experience, and available time you have will directly impact how long it will take you to study for the SEE exam. I would recommend most people study at least one month for each part.
What are the pass rates of the Enrolled Agent Exam?
Pass rates of the Enrolled Agent Exam vary slightly every year. Any given year, you can expect around a 60% pass rate for Part 1 and 2. The Part 3 pass rate is typically around 80%.
Accounting Certification Frequently Asked Questions (FAQs)
There are a lot of accounting certification common questions. I’m going to address the more popular accounting certification questions here in hopes that I’ll address any question you might have.
Which is the easiest accounting certification?
I wouldn’t get an accounting certification based on how easy it is. Instead, I would recommend you really think about which areas of accounting you would like to work in and then work towards passing the exam(s) that will suit your career path best. Most things in life worth getting are going to be challenging.
Do I need an accounting certification?
If you’re looking to take your career to new heights or enhance your level of job security, then you should seriously consider getting an accounting certification. Most people committed to their career path pursue certifications that compliment their related degree. Employers certainly look for accounting certification(s) during the hiring and promotion process. Not to mention, some positions require you have a certification such as the CPA.
In short, you can get an accounting related job without an accounting certification, BUT if you really want to succeed in the accounting profession, I would HIGHLY recommend getting an accounting certification that fits your career path. In many cases, I would recommend getting your CPA and then in addition to that get one of these other certifications discussed in this article if it makes sense for your accounting career path.